Tag Archives: business

Oil output drops in Azerbaijan

DEC. 14 2016 (The Conway Bulletin) — Azerbaijan produced around 1.5% less oil and gas condensate in the first 10 months of the year, media quoted its statistics committee as saying, reflecting its inability to maintain production. Azerbaijan has previously used OPEC oil cuts as a fig leaf to explain its falling production. The reality is, though, that it hasn’t been able to maintain output.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Turkmenistan and Afghanistan open railway

NOV. 29 2016 (The Conway Bulletin) — Turkmenistan and Afghanistan opened a long awaited rail link which should ease trade, especially shipments of refined fuel. Turkmenistan’s economy relies of gas sales, mainly to China, but it has been looking to diversity into refined fuel and electricity exports and it sees Afghanistan as a potentially important market. It has built a 540,000 tonne oil product terminal at the Ymemnazar customs point on the border with Afghanistan.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

BTC flows to drop, according to Azerbaijan’s state budget

NOV. 25 2016 (The Conway Bulletin) — The Baku-Tbilisi-Ceyhan (BTC) pipeline will drop oil transport next year, according to a forecast in Azerbaijan’s state budget. In 2017, BTC will transport 31m tonnes, down from 32.5m tonnes that the government forecast for this year. In 2016, exports via BTC increased, but the share of Azerbaijan’s SOCAR in pipeline sales decreased in favour of its foreign partners.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Taliban to protect Turkmen pipeline

NOV. 29 2016 (The Conway Bulletin) — Apparently in a bid to win popular support from locals, the Taliban have pledged to protect major infrastructure projects planned for Afghanistan, media reported, including the ambitious TAPI gas pipeline that is being built. TAPI is supposed to run from Turkmenistan to India via Pakistan and Afghanistan. It is one of the most ambitious infrastructure projects attempted. One of its major weaknesses, its critics pointed out, was the poor security situation in Afghanistan. If they do support TAPI, the Taliban would immediately improve its prospects of success.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Azerbaijani gold miner connects to grid

NOV. 30 2016 (The Conway Bulletin) — Azerbaijani gold miner Anglo Asian said it connected its Gedabek mine to the national electricity grid, which would save the company around $2.3m/year. The connection cost $2.1m. Previously, the company used diesel generators to produce electricity. Anglo Asian CEO Reza Vaziri said that with unrestrained and cheaper electricity, the company will also be able to expand production.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Kazakhstan links two gas pipelines, boosting flows to China

ALMATY, NOV. 29 2016 (The Conway Bulletin) — Kazakhstan’s state- owned distributor KazTransGas said it had completed building a compressor station that will link two main gas pipelines and allow it to pump more gas to China, a key client for Central Asian energy producers.

The Bukhara-Bishkek-Almaty pipeline will now be linked directly to the Kazakhstan-China gas pipeline, boosting Kazakhstan’s transit capacity and securing supplies to Almaty, Kazakhstan’s biggest city. The route will allow the giant gas fields in the west of Kazakhstan to pump gas directly to China.

Dair Kusherov, deputy director of KazTransGas enthused about the options that linking the pipelines would bring.

“First, we have opened a route to export domestic gas to China, expanding our export and transport capabilities,” media quoted him as saying at the opening of the compressor station. “Second, the link will provide uninterrupted gas supplies to the city of Almaty and Almaty region. Third, the new station provides a backup route for uninterrupted gas supply to consumers in Almaty via gas pipeline bypassing the territory of the Kyrgyz Republic.”

Boosting its gas transit options eastwards also highlights China’s dominance over energy flows from Central Asia.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

UK’s Gunsynd invests in Azerbaijan

NOV. 30 2016 (The Conway Bulletin) — British investment company Gunsynd increased its stake in Zenith Energy, a Canada-based oil and gas company focused on Azerbaijan. Gunsynd bought 300,000 shares for £49,000 ($62,000) and now holds a 1.6% stake in the company. Zenith’s subsidiary, Zenith Aran Oil, signed a production sharing agreement with state-owned SOCAR in March for the exploitation of several small- scale oil fields.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Opec, Azerbaijan and Kazakhstan

DEC. 2 2016 (The Conway Bulletin) — Oil prices shifted up more than 10% after OPEC, the group of oil exporting countries, agreed to reduce output by 1.2m barrels/day starting in January.

This is good news for oil-rich countries across the South Caucasus and Central Asia, as the potential positive impact on oil prices could be sustained for a few months longer.

Throughout 2016, OPEC has repeatedly pledged to decrease output if non-OPEC countries also participated in the cut. In reality, though, the issue at stake was Saudi Arabia’s unwillingness to relinquish market share to Iran, who had just re-emerged from western sanctions and rapidly increased its output.

Now Saudi Arabia will slash 500,000 barrels/day from its output of around 11m barrels/day. Other OPEC countries will cut a total of 700,000 barrels/day and some non- OPEC countries pledged cuts for 600,000 barrels/day. For reference, the total cut would be 20% larger than Kazakhstan’s total oil production in 2016.

In fact, both Kazakhstan and Azerbaijan have used the OPEC deals as smokescreens to conceal declining production figures, as some of their projects have become unsustainable at low oil prices.

The output from the giant offshore field of Kashagan, which is three years late in hitting commercial levels of production, is no consolation either for Kazakhstan. Analysts have said that the field, sited in the northern part of the Caspian Sea, is profitable only with oil prices at $100/barrel at a minimum, a figure that is currently not on the horizon.

This means that Kazakhstan’s government will have to wait longer to reap the benefits of its largest oil basin.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Tax authorities in Kazakhstan investigate Karachaganak

NOV. 24 2016 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev said the tax authorities are investigating the consortium operating the Karachaganak gas and condensate field in the north of the country for unpaid taxes and that the government will seek a new profit sharing scheme. Anglo-Dutch energy company Shell and Italy’s Eni are the field’s operators and largest shareholders with a 29.25% stake each. US-based Chevron (18%), Russia’s Lukoil (13.5%) and state-owned Kazmunaigas (10%) own the rest.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Chemical plant in Armenia declares bankruptcy

NOV. 30 2016 (The Conway Bulletin) — A court in Armenia declared the Nairit chemical plant bankrupt after it failed to pay back its $2.5m electricity bill to Electricity Networks of Armenia, the national distributor. Nairit halted operations in 2010, as its rubber and latex plant became unprofitable. A recent audit said that a $300m investment would be necessary to resume operations and the World Bank recommended the plant be declared bankrupt. British- registered Rhinoville Properties has owned 90% of the plant since 2006. The Armenian government owns 10%.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)